Why Pernix Theraputics Holdings Inc. Shares Popped Today

Is this meaningful? Or just another movement?

May 27, 2014 at 6:44PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Pernix Theraputics Holdings Inc. (NASDAQ:PTX) closed the trading day with a gain of nearly 10%, after topping out at a near-12% pop in the mid-afternoon, following an analyst upgrade.

So what: Analysts at Aegis boosted their rating on Pernix to a buy from the earlier "hold," citing the company's $250 million acquisition of the U.S. rights to Treximet -- a migraine treatment -- from GlaxoSmithKline (NYSE:GSK). Aegis' price target is now $9, which offers a further 25% upside from current levels, based on Treximet's sales base and room for growth, as the drug accounted for $79 million in net sales during GlaxoSmithKline's 2013 fiscal year, and Pernix expects the drug to nearly double its revenue in 2014, eventually leading to an estimated $230 million in revenue for 2015, which will produce an EBITDA margin topping 40%.

Now what: Pernix already has several drugs on the market, but none are as successful as Treximet, and the company's ramp-up in marketing resources -- the company will have 90 salespeople pushing the drug once the deal closes -- makes it a good source of future cash flows for the unprofitable company. Pernix shares had already doubled this year following a string of good news that culminated in the company's Treximet rights acquisition earlier this month, so this is hardly the first sign of investor optimism, but a 40% EBITDA margin could quite easily translate to positive earnings for the first time in years. Pernix certainly isn't the bargain it was in 2013, but it might have more upside left beyond the 25% Aegis expects. Dig in a little deeper and you might find a good growth-stock opportunity here.

Invest in the next wave of health care innovation
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion-dollar industry." And the technology behind is poised to set off one of the most remarkable health care revolutions in decades. The Motley Fool's exclusive research presentation dives into this technology's true potential, and its ability to make life-changing medical solutions never thought possible. To learn how you can invest in this unbelievable new technology, click here now to see our free report.

Alex Planes and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information